Penn Virginia initiated BUY at SunTrust Robinson Humphrey
Target is $18
Analyst is Neal Dingmann
Q1 production of 26,740 Boe per day will dip sharply in Q2 due to shut-ins. Production should rebound in Q3 and Q4 to an exit rate over 23,000 Boe per day. The company halted all drilling activity in April and is now using free cash flow to pay down debt.
Penn Virginia (PVAC) Update - July 24
Penn Virginia (PVAC) Update - July 24
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Penn Virginia (PVAC) Update - July 24
I have updated my forecast/valuation model for PVAC and posted it to the EPG website. My valuation stays at $23.00.
Here is what I like:
> PVAC has more than 100% of their oil production for Q2 and Q3 hedged at more than $52/bbl, so it will cash BIG settlement checks this year.
> PVAC has halted all drilling and is using free cash flow to pay down debt, so it will have ample liquidity heading into 2021.
> The Company is on-track to generate over $11.00 operating cash flow per share this year.
> Shut-ins are back online and production should ramp up to an exit rate of ~23,000 Boe per day in Q4.
> Even a modest drilling program, fully funded by operating cash flow, should take production up to 30,000 boepd by year-end 2021.
Here is what I like:
> PVAC has more than 100% of their oil production for Q2 and Q3 hedged at more than $52/bbl, so it will cash BIG settlement checks this year.
> PVAC has halted all drilling and is using free cash flow to pay down debt, so it will have ample liquidity heading into 2021.
> The Company is on-track to generate over $11.00 operating cash flow per share this year.
> Shut-ins are back online and production should ramp up to an exit rate of ~23,000 Boe per day in Q4.
> Even a modest drilling program, fully funded by operating cash flow, should take production up to 30,000 boepd by year-end 2021.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group